Unfortunately that a Bournville residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the early years due to the reduction being disguised by increases in the Bournville property market.Where your lease has approximately ninety years left, you should start thinking about a lease extension. If lease term drops below eighty years, you will end up paying half of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property Most leasehold owners in Bournville will be able to extend under the legislation; however a conveyancer should be able to clarify whether you qualify for an extension. In some cases you may not qualify. There are also strict timeframes and procedures to follow once the process is instigated and you will need to be guided by your lawyer from beginning to end of the formalities.
Leasehold properties in Bournville with in excess of 100 years left on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such circumstances there is often little upside in buying the freehold unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | |
| Barnsley Building Society | |
| Coventry Building Society | |
| Godiva Mortgages | |
| The Mortgage Works |
The conveyancers that we work with procure Bournville lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancing solicitor we work with provide it.
Leon was the the leasehold owner of a high value apartment in Bournville being sold with a lease of a few days over 61 years left. Leon informally spoke with his freeholder being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent initially set at £100 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Leon to invoke his statutory right. Leon procured expert legal guidance and secured an acceptable deal informally and readily saleable.
Last month we were called by Mr and Mrs. K Bonnet , who completed a first floor apartment in Bournville in January 2004. The question was if we could estimate the price would likely be for a ninety year lease extension. Similar properties in Bournville with an extended lease were valued around £176,200. The average amount of ground rent was £65 collected per annum. The lease elapsed in 2082. Taking into account 56 years outstanding we approximated the premium to the landlord to extend the lease to be between £29,500 and £34,000 exclusive of professional charges.
Last Christmas we were e-mailed by Dr H Michel , who acquired a ground floor apartment in Bournville in June 2011. We are asked if we could estimate the price could be for a ninety year extension to my lease. Comparable properties in Bournville with a long lease were worth £242,600. The mid-range ground rent payable was £45 collected every twelve months. The lease expired in 2093. Given that there were 67 years as a residual term we estimated the premium to the landlord for the lease extension to be within £11,400 and £13,200 not including professional charges.